What is the Blue Ocean Strategy, How to use it and Free Strategy Templates
Blue ocean strategy is a business idea that gives merit to the situation whereby companies search for uncontested space within a market rather than engaging in competition with other companies.
Traditionally companies get involved in vigorous fight against each other for a piece of market. The blue ocean strategy suggests that organizations should venture into ways that establish a marketplace that is free of competition.
This strategy will assist companies succeed in the event that they stop battling and competing but systematically create “blue oceans” new market space ready for growth.
Many companies have a great potential of expanding, the blue ocean strategy makes it possible for such growth because it attracts many customers and increases the cost of competition simultaneously.
The tools for capturing blue oceans are:
- buyer map
- buyer experience
- blue ocean idea strategy
The tools enable collective wisdom growth of a company while effectively executing strategy. To find blue oceans entrepreneurs have to consider ways to reconstruct value elements of their buyers and craft new value curve.
The framework through which the organizations should work on should consider, the factors that need to be raised above the industry’s standard. Also elimination of factors they have long competed for and reduce factors that are below the standards of the industry as they create factors the industry is yet to offer.
Blue Ocean Strategy vs. Five Forces Model
The five force model helps companies determine ways to best compete in an existing marketplace.
The models known as the porter model looks into ways to determine whether a business can be successful or not based on already existing businesses in the market.
A blue ocean strategy however considers ways to have water to oneself without remaining in the ‘red oceans’.
Business success according to Blue Ocean strategy is based on redefining terms of competition. The strategy emphasizes the merits of moving to the ‘blue ocean’.
Blue Ocean strategy emphasizes that companies should not focus on their competitors but look into alternatives of venturing into creating new potential customers.
Examples of Blue Ocean Strategy
The Cirque du Soleil
Cirque made money through creating free market space making competition irrelevant. Cirque did not compete or steal customers but went for a whole new group of customers who before then were not customers of the industry. Cirque went for adults and corporate clients who were no longer interested in circus tickets. The clients were committed and ready to pay more for theater, opera or ballets to get unprecedented experience.
The Southwest Airlines
The airline has successfully executed the blue ocean strategy by tapping into a customer base that like to air travel on lower cost. The airline did not go competing with other airlines but positioned herself offering an alternative to cars at reduced prices. The airline further improved her check-in times and considerably making more flight frequencies. As customers benefited from high traveling speeds of airplanes at low cost the airline benefited the acquiring of new customer base.
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